Losing a friend or family member is one of the most difficult things that you will go through, and the grief and mourning process that follows is one that can put your life on hold, and never really leaves you. Nobody wants to be in that position, but more than anything, nobody wants to have to spend a long time dealing with money matters. You should be able to get this over with as quickly as possible, so that you can focus on what’s important.
Whilst it’s an uncomfortable subject, it is key that you know how to deal with any inheritance money, and we’ve put together 5 things worth knowing here.
#1: It is taxed, heavily
Unfortunately, the inheritance tax in the UK is extremely high at 40%. However, this only applies if your loved one’s estate is worth more than £325,000, and this includes any money that they have saved up, property, and any of their other possessions. There is a higher threshold if the deceased is leaving their estate to their children, so keep this in mind if you’re not sure about whether inheritance tax applies.
#2: You’ll need to get a grant of probate
If your relative or friend has appointed you the executor of their will, then you will need to be the one who deals with the paperwork side of the inheritance. However, before you can do this you need to get a grant of probate (providing that there is a will). You can deal with this yourself, or go through a company like Mr Probate if you’d prefer to leave the tricky stuff to the professionals.
#3: It can be difficult
Whilst many families deal well with the process of organising inheritance money, there are so many people out there who show their true colours, and this is something that can become even more stressful with the addition of grief. Sit down and talk to your family members calmly about the will, and try not to let it become a sore topic. Your friend or relative certainly wouldn’t want it to be one.
#4: It’s not always clear cut
OK, so a loved one has left you some money in their will. Pretty simple, huh? Well, not really. They may have specified that you can’t have it until a certain year, or that you need to use the funds for something like a university course. Things aren’t always as clear cut as they seem! You also need to work out the value of any property, and sell it at a price agreed upon by all involved. In short, it’s not always easy.
#5: You probably need financial help
It’s highly likely that you’re usually pretty financially savvy, but inheriting money is sort of like winning the lottery. You’ve got a large amount of cash, and you don’t really know how to deal with it properly. Stick it into some savings accounts, and speak to a professional about how best to manage it. You don’t want to be within the high percentage of people who blow it all within a few years!
Good luck dealing with your inheritance money, and focusing on the things that really matter.
This is a collaborative post.